Innovations in Banking and Finance

Topics : Innovations in Banking and Finance

New competitive environment, Home banking
Implementing home banking
Using personal finance software, Using on-line services,
Using the Web in Corporate Finance
Intranet in financial management, HR strategy, Finance software market

E-commerce transform banking and financial systems. There are three aspects in which e-
commerce can affect banking and finance. First, banks and financial firms can use the
technology and business practice of e-commerce to market their products to the customers.
Second, e-commerce provides a business opportunity for banks to offer new products and
services to serve the needs of e-commerce. Third, the new business environment associated
with e-commerce provides opportunity for institutional innovations in banking and finance, which
can help to lay a sounder foundation for the international financial system. Thus, e-commerce
act as an enabling factor to transform banking and finance in a radical manner.

Banking practices have changed in some ways to keep up with customer expectations and
technological demands set forth by e-commerce experiences. Here are some of the most
important current applications of e-commerce in banking.

1. Electronic billing
Electronic billing is one of the biggest benefits that e-commerce has brought to both consumers
and businesses. Banks now offer the ability to automatically pay your bills through their website
or on their app. Companies can send out electronic invoices to their customers and receive
payment automatically instead of waiting for and cashing a physical check. The
connection between the ability for banks to send and receive payment digitally and the
rise of e-commerce as a primary driver of sales and revenue in many businesses is not
a coincidence; it would be nearly impossible to effectively have one without the other.

2. ID verification
Banks can and should take identification very seriously. The job of a credible financial institution
is to ensure that the person spending is the person who should have access to the funds in the
account. This has become harder the more technology has advanced. But technology has also
helped drive innovation in the ability to confirm the identity and other credentials so that
customers can conduct their e-commerce transaction more securely, without the possibility of
data being stolen or leaked This identification process is not just a protection for the customer,
but also for the retailer or vendor. It’s the responsibility of all stakeholders – banks and e-
commerce retailers alike – to uphold ID verification and customer information security
standards.

3. Mobile payments
Mobile commerce, or m-commerce, is an important part of e-commerce. Mobile focused
commerce has become a new normal for many people who are now able to buy everything from
a dog sitter to a plane ticket from their phone. A smartphone has become another important e-
commerce tool, however – a digital wallet. Customers can now pay for many of their in-person
purchases with a smartphone app, whether it’s a bank-backed credit card app or an app like
Apple Pay which keeps payment options for customers’ various financial sources together in
one place for easy payment. While mobile payments are more often used to describe in-person
digital transactions, they are definitely born out of the application of e-commerce in banking
endeavors.

4. Digital-only banking
E-commerce has enabled app payments and transactions, leading the way for reeducation in
physical brick and mortar banks. While many large banks with an e-commerce presence do still
have in-person presences in certain communities, many banks have opened as online-only
operations, such as Ally. Mortgage brokers have joined the only online finance trend as well.
Having users interact with their banking primarily through an app is in line with how consumers
interact with many other parts of their daily lives, from paying for coffee to ordering groceries to
set doctor’s appointments and more. Online-only banks can also offer a better banking
experience by often being able to give customers a better interest rate on savings accounts or
loans because of the money the bank itself was able to save by not having to pay overhead
costs like rent, etc.

5. B2B innovation
The e-commerce experience has changed the way B2B buyers anticipate buying and selling
experiences to go. This has largely been due to the implication of e-commerce in banking in
B2C spheres. E-commerce has enabled banks to offer faster account opening, digital invoice
payment, and other conveniences that B2C buyers have long enjoyed. B2B buyers have
experienced these features in their non-business life and are making demands in the
marketplace that their B2B experience is more consistent and matches the rest of modern life.
E-commerce and banking, then, have a responsibility to continue to elevate the customer
experience.

6. International commerce
E-commerce has made it easier for people to bank internationally or pay for goods and services
from another country without having to work around banking regulations or exchange rates.
Third-party vendors like PayPal work as a go-between for e-commerce retailers and financial
organizations and banks.
E-commerce has created a lot of opportunities for banking and the applications of e-commerce
in banking continue to grow, with both retailers and finance organizations working to create a
better customer experience through technology that will help businesses from both industries
grow revenue and strengthen their brand.
Here is a diagram on interaction methods that continue to evolve in banking and financial
institutions.

Our dear students, please watch and read the following websites and perform the
activities/assessment mentioned.

Watch: https://www.businessinsider.com/future-of-banking-technology
Read: https://www.wowso.me/blog/technology-in-banking or:

Ten Banking Technologies That Are Shaping The Future

 
1. Augmented Reality

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Immersive technologies such as Augmented, virtual, and mixed reality are enhancing customer
experience across the board. So why can’t they do the same for banking customers? The
possibilities of the implementation of augmented reality technology in banking sector are only
limited by imagination, though these are still in a very early stage of development. The end-state
is to give customers complete autonomy in actions and transactions they could perform at
home. Hybrid branches are envisioned by technology experts who believe that bank branches
as we know them today are a thing of past.
Source: PWC 

Also See: 11 Banks That Have Successfully Adopted Augmented Reality 

One of the implementations of augmented reality technology in banking sector, that is already
live, has been made by the Commonwealth Bank of Australia. They have created a rich date
augmented reality application for their customers who were looking to buy or sell a home. It
provides them with information like current listings, recent sales, and price tendencies to help
the customer make better decisions.

 2. Blockchain

Blockchain is a catchall phrase used to describe distributed ledger technologies. You could think
of it as a distributed database with no DBA involved. It allows multiple parties to access the
same data simultaneously, and at the same time ensures the integrity and immutability of the
records entered in the database. At present, leading banks around the world are exploring proof
of concept projects across various aspects of banking and financial services.
 
The first major implementation that we are likely to see is in the areas for clearing and
settlement. Accenture estimates that investment banks would be able to save $10 billion by
deploying blockchain technology to improve the efficiency of clearing and settlement systems.
Another major area in which banks will see a huge saving by using blockchain technology is
KYC (Know Your Customer) operations. Business models being developed at the moment
would turn KYC from a cost centre into a profit centre for banks – as they would come to rely on
a shared blockchain for this activity. Syndicated loans, trade finance and payments are other
areas where the smart contracts on blockchain could be highly effective.

3. Robotic Process Automation

The volume of unstructured data that the bank has to process is increasing exponentially with
the rise of the digital economy. This is not just banking transaction data, but also other
behavioral data that could potentially allow the banks to improve and innovate customer
experience.
This has made bankers realize that they need to find technologies that can mimic human action
and judgment but at a higher speed, scale, and quality. The answer that has emerged is a
combination of various technologies that enable cognitive and robotic process automation in
banking.
These technologies consist of machine learning, natural language processing, chatbots, robotic
process automation, and intelligent analytics in banking that allow the bots to learn and improve.
It is no surprise that Deloitte’s 2017 State of Cognitive survey found that 88% of financial service
professionals believe that such technologies are a strategic priority. That said, the current state
of the art in robotic automation is still quite weak at the cognitive and analytical aspects of the
processes.

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In the years to come, we would see the current cognitive capabilities being bundled with the
robotic process automation to achieve even better results. This is already being implemented in
point- of-sale

solutions that automatically suggest marketing promotions that would be most effective for an
individual customer.

4. Quantum Computing
Quantum computing is a way of using quantum mechanics to work out complex data operations.
As is common knowledge today, computers use bits that can have two values – 1 or 0.
Quantum computing uses “quantum bits” that can instead have three states – 1 or 0 or both.
This unlocks exponential computing power over traditional computing – when the right algorithm
is used.

This represents a huge leap in computing power, but any commercial implementations are still
decades away. Nevertheless, firms like JPMorgan Chase and Barclays are investing in quantum
computing research in partnership with IBM.

5. Artificial Intelligence
The explosive growth that the last decade has seen in the amount of structured and
unstructured data available with the banks, combined with the growth of cloud computing and
machine learning technologies has created a perfect storm for Artificial Intelligence to be used
across the spectrum of banking and financial services landscape.

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Business needs and capabilities of AI implementations have grown hand-in-hand and banks are
looking at Artificial Intelligence as a differentiator to beat down the emerging competition.
Artificial Intelligence allows banks to use the large histories of data that they capture to make
much better decisions across various functions including back-office operations, customer
experience, marketing, product delivery risk management, and compliance.

WEF report “the New Physics of Financial Services” has identified the following sector-specific
opportunities that will be opened thanks to AI deployment in banking and financial services.
These opportunities are spread across deposits, lending, payments, investment management,
capital markets, and market infrastructure.

Artificial intelligence would revolutionize banks by shifting the focus from the scale of assets to
scale of data. The banks would now aim to deliver tailored experiences to their customers rather
than build mass products for large markets.
Instead of retaining customers through high switching costs, banks would now be able to
become more customer-focused and retain them by providing high retention benefits. Most
importantly, banks would no more just depend on human ingenuity for improving their services.
Instead, performance would be a product of the interplay between technology and talent.

6. API Platforms 
Source: CA Technologies

The time when banks could control the whole customer experience through a monolithic system
that controlled everything from keeping records to every customer interaction is long gone. Both
the regulatory requirements and the revolving customer needs have turned this humongous
system into dinosaurs.
Today banks need to instead build “banking stacks” that allow them to be a platform to which
customers and third-party service providers can connect to deliver a flexible and personalized
experience to the end user. To do so, they can use API platforms for banking. API Banking
Platform is designed to work through APIs that sit between the banks' backend execution and
front-end experiences provided by either the bank itself or third party partners. This allows the
banks to adopt completely new business models and use cases (for example, enabling salary
advances) and experiment with new technologies like blockchain at low cost. APIs also help
banks to future-proof their systems as the front-end is no more tightly coupled with the backend.

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7. Prescriptive Security
The nature of cyber risk changes at a great speed. This makes the traditional approaches to risk
management obsolete. It is now clear that it is impossible for organizations to eliminate all
possible sources of cyber threats and limiting the attack footprint at the earliest is the best way
to deal with these. The banks will have to be nimble in the way they approach cybersecurity.
Increasingly banks are deploying advanced analytic, real-time monitoring and AI to detect
threats and stop them from disrupting the systems. The use of big data analysis techniques to
get an earlier visibility of threats and acting to stop them before they happen is called
prescriptive security.
While the disruption brought by implementing the new technique may lead to an increase in
vulnerability at the start, this is the way forward to stop the ever increasing data breaches that

various organizations are reporting.

8. Hybrid Cloud
One of the biggest challenges that the digital age has brought to banking is the need to respond
quickly. The constantly evolving market that banks operate in requires them to be as agile as
possible. They need to be able to provide resources across the enterprise in a timely manner to
address business problems faster.
High performing banks have discovered that the most cost-effective way of achieving this is
through an enterprise-wide hybrid cloud. This allows them to pick benefits of both public and
private while addressing issues like data security, governance, and compliance along with the
ability to mobilize large resources in a matter of minutes.

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Hybrid cloud also allows banks to offer innovative new offerings to its customers. For example,
ICICI Bank has partnered with Zoho to allow businesses to automate the basic reconciliation
process through Zoho Books, a cloud accounting software. The partnership does away with the
need for data entry and also makes it easier to offer multiple payment options to the customers.

9. Instant Payments
As the world moves towards a less-cash economy, the customer expectations around payments
have changed dramatically. Both customers and business expect payments to happen
instantaneously, and this is where instant payment systems step in.
Instantaneous payment is a must if online payments need to replace cash transactions.
Therefore, banks around the world are finding ways of providing their customers options for
instant payment, even when the infrastructure required for the service is lacking.
For example, banks in Kenya are partnering together to provide P2P payment experience to
their customer base. You would soon see banks combining their instant payment capabilities
with third-party e- and m-commerce solutions to develop a new portfolio of services.

10. Smart Machines

You must have already seen assistants like Amazon’s Alexa and Google Home in action. Can
you imagine the impact these could have on banking applications?
In fact, Bank of America has already developed Erica as a virtual assistant specifically for

banking operations. These smart machines are beginning to act as digital concierges for the
customer in interacting with banks as well.

Banks will have to invest in digital engagement to ensure long lasting relationships with the
customer. Remember that customers will gravitate towards banks that are easiest to work with
when they are using technologies that they have become habituated to.

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Summing it Up

According to a survey of bankers conducted by PwC: “Respondents say skills in their

organization lag across a range of highly important areas, including cybersecurity and privacy,
business development of new technologies and user experience and human-centered design.
Worse, skill levels have declined even as the demands of digital keep advancing.”
As the banks recognize this skill gap that stops them from transforming to meet the potential
presented by technology – they are beginning to invest significant amounts into banking
technologies they seem most relevant for their business models.
For example, blockchain might not be a priority for most industries today, but banks and
financial institutes foresee a great advantage in implementing these. Therefore, the financial
services industry as a whole sees them as a high priority investment.

Further, the evolution of the banking industry makes it imperative that technology becomes a
“core competency” with enterprise-wide engagement. The technology focus cannot be limited to
the top alone, or even to an IT department cutoff from the rest of the operations.
Finally, the focus of technology implementation must be customer experience – and not revenue
or cost savings. Those are important but will come automatically if you can retain customers in
the years to come.

In the years to come, bankers will have look at FinTech startups as partners rather than
competitors. Remember that a bank can be the biggest customer for a FinTech company and
can help them reach a newer customer base.
This is where developing a banking platform will come in handy and result in better customer
satisfaction. Bankers should work towards new business models where they own the customer
relationships and pull together FinTech resources from around the globe to generate the most
value for the end customer.

Review:
https://www.researchgate.net/publication257714381_The_Impact_of_Information_Technology_i
n_Banking_System_A_Case_Study_in_Bank_Keshavarzi_IRAN

Case Study 3. The Impact of Information Technology in Banking System (A Case Study in
Bank Keshavarzi IRAN) Saeid Khajeh dangolani Bank Keshavarzi, IRAN

Abstract

The advent of information technology to every aspect of human life and business has been so
obvious that it does not need to be accentuated more. Information technology has been of great
essence in banking system. This study aims to investigate the effect of information technology
in the banking system of Bank Keshavarzi Iran. The data are obtained both through the
customers and the employees. The data were then analyzed using the exact percentage and
the 5-point Likert scale to determine the impact of Information technology in the banking system
affairs. The findings then proved that Information technology contributes to the banking system
in three different ways as follows: IT saves the time of the customers and the employees

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conspicuously, IT cuts down the expenses and IT facilitates the network transactions. © 2011
Published by Elsevier Ltd.

Key words: Information Technology; Bank Keshavarzi Iran; time saving; expenses; network
transactions

1. Introduction

All the necessities of modern life brought light to the fact that information for the modern
organization is a resource parallel in importance to land, labor and capital. It is very vital and a
priceless resource. It is no longer news that we are now in information age that is characterized
by an ever-changing information technology revolution and an information superhighway on
which every corporate entity and profession must more, if it is to survive in the 21st century.
The sector that has been most radically affected by the information technology developments is
the banking system. The information technology has become a critical business resource
because its absence could result in poor decisions and ultimately business failure. Technology
has opened up new markets, new products, new services and efficient delivery channels for the
banking industry. Online electronics banking, mobile banking and internet banking are just a few
examples.

Information Technology has also provided banking industry with the wherewithal to deal with the
challenges the new economy poses. Information technology has been the cornerstone of recent
financial sector reforms aimed at increasing the speed and reliability of financial operations and
of initiatives to strengthen the banking sector.

The IT revolution has set the stage for unprecedented increase in financial activity across the
globe. The progress of technology and the development of worldwide networks have
significantly reduced the cost of global funds transfer. © 2011 Published by Elsevier Ltd.
Selection and/or peer-review under responsibility of the 2nd World Conference on Psychology,
Counselling and Guidance.

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Saeid Khajeh dangolani/ Procedia – Social and Behavioral Sciences 00 (2011) 000–000

It is information technology which enables banks in meeting such high expectations of the
customers who are more demanding and are also more techno-savvy compared to their
counterparts of the yester years. They demand instant, anytime and anywhere banking facilities.
Other researches show that information technology has been providing solutions to banks to
take care of their accounting and back office requirements. This has, however, now given way
to large scale usage in services aimed at the customer of the banks. IT also facilitates the
introduction of new delivery channels--in the form of Automated Teller Machines, Net Banking,
Mobile Banking and the like. Further, IT deployment has assumed such high levels that it is no
longer possible for banks to manage their IT implementations on a standalone basis with IT
revolution, banks are increasingly interconnecting their computer systems not only across
branches in a city but also to other geographic locations with high-speed network infrastructure,
and setting up local area and wide area networks and connecting them to the Internet. As a
result, information systems and networks are now exposed to a growing number. All in all, this
auspicious technology influences the banking industry, mainly in the following three aspects:

1. Technology is influencing competition and the degree of contestability in banking. Due to the
development of technology, bank’s superiority in information is deteriorated. Entry barrier have

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been declining, new competitor have emerged. Some financial products and services have
become more transparent and commodities, customer show willing to unbundled the demand
for financial products and services, all these lead to a more competitive market environment.
Due to lowered entry and exist and deconstruction, for some sub-financial markets,
contestability in banking is also raised.

2. Technology influence Economy of scale: Competitive pressure force banks to lower their
cost. Bank seeks to get economy of scale in bank procession instead of being a big bank. Bank
seeks to secure the optimal business structure, and secure the competitive imperative of
economy of scale. There are other options to get economy of scale, including joint venture and
confederation of financial firms. Small firms also can get economy of scale by outsourcing, i.e.
buy in economy of scale.

3. Technology influence the economics of delivery

Technology has a major impact on the way banking and financial services are delivered. A wide
range of alternative delivery mechanism becomes available, Internet, ATM… these Reduces the
dependence on the branch network as a core delivery mechanism. With the development of
technology, the financial systems are substantially over-supplied with delivery system through a
duplication of net work, bank has to change their delivery strategy, rationalize their branch
network strategy, and widen the range of delivery option.

Banking industry has been taking advantage of the following 22 Technology Products:

(1) Net Banking;

(2) Credit Card Online;
(3) One View;
(4) InstaAlerts;
(5). Mobile Banking;
(6) NetSafe;
(7) e-Monies Electronic Fund Transfer;
(8) Online Payment of Excise & Service Tax;
(9) Phone Banking; (10). Bill Payment; (11). Shopping;
(12) Ticket Booking;
(13) Railway Ticket Booking through SMS;
(14) Prepaid Mobile Recharge;
(15) Smart Money Order;
(16) Card to Card Funds Transfer;
(17) Funds Transfer (eCheques);
(18) Anywhere Banking;
(19) Internet Banking;
(20) Mobile Banking;
(21) Bank@Home (i) Express Delivery;
(22) Cash on Tap: (ii) Normal Delivery.

The research questions are as follows:

1. Does IT have a meaningful effect on saving the time of the customers and the employees of
bank Keshavarzi Iran, Golestan province?
2. Does IT have a meaningful effect on cutting down the expenses of bank Keshavarzi Iran,
Golestan province?

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3. Does IT have a meaningful effect on facilitating the network transactions of bank Keshavarzi
Iran, Golestan province?

2. The Review of Related Literature

The number of studies on information technology in the literature is abounding and is

dramatically on the rise due to its indispensable significance in all aspects of our life. As
Princhard and Cole (1997) state, Information Technology (IT) is a term, which generally covers
the harnessing of electronic technology for the information needs of business at all levels. It is a
computer based system as well as telecommunication technology for storage, processing and
dissemination of information. The role of information technology in the banking industry is
accentuated too but not sufficient in Iran. Lichtenberg (1995) concludes that there is significant
benefit from investment in Information Technology especially in the Banking Industry. Mario
Castelino (2006) suggests that Indian banking industry has provided the leading edge to what is
happening to the Indian economy. Banks have equipped themselves with the latest of
technology--core Banking. Business Process Reengineering has been introduced to enhance
spleen and efficiency of delivery.

Information Technology has basically been used under two different avenues in Banking. One is
Communication and Connectivity and other is Business Process Reengineering. Information
technology enables sophisticated product development, better market infrastructure,
implementation of reliable techniques for control of risks and helps the financial intermediaries
to reach geographically distant and diversified markets. But focusing on both threats and
opportunities of information technology, Blili and Raymond (1993) concluded that the strategic
use of information technology can both threaten and benefit small and medium-sized
enterprises (SMEs). In this paper, the strategic importance of information technology is
analyzed in light of the specificity of these organizations. Planning approaches are then
outlined, focusing on how SMEs can attain a mastery of information technology for competitive
advantage. There are also statistical reports regarding the banking industry affected by IT
announced by organizations throughout the world. For instance, you can find those released by
Computer Industry Report, March 27, 1992 as follows:

The banking sector in the survey base saw budgets drop 10% on average in 1991, and expects
only average growth in 1992. With average site budgets in excess of $4 million, the highest in
the survey group, the downturn for banking has affected the entire IT market. Banking had the
highest negative rating in its attitude towards IS spending; almost half checked choices
indicating stable spending with no major growth in any area, or a contraction of spending.
Controlling costs is a critical imperative for nearly two-thirds of the banking community, by far
the highest ratio for any of the sectors surveyed. The replacements will presumably be largely
PCs, since banking had the lowest percentage (18%) agreeing that UNIX workstations are
becoming a viable alternative to traditional personal computers. A survey-low 29% of PCs in
banking were connected to a host computer, compared to an average of two-thirds.
Overwhelmingly the major activity of software staff at banking sites is systems or network
maintenance, which accounted for 60% of staff time compared to an average of 33%.Only 16%
of staff time went to developing new applications.

3. Method

Both Exploratory Research and Descriptive Research were used in accomplishing the objective
of the study.

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3.1. Sampling Design

Random sampling is the sampling design of this study; it is the most appropriate design to use
in this study since the researcher decided the sample size of the study i.e. 100 bank customers
and a sample of 20 clerical and 20 managerial in the bank.
16 Saeid Khajeh dangolani / Procedia - Social and Behavioral Sciences 30 (2011) 13 – 16
Saeid Khajeh dangolani/ Procedia – Social and Behavioral Sciences 00 (2011) 000–000

Primary research was conducted using questionnaire surveys to them. The researcher tallied,
scored and tabulated all the responses in the provided survey questions. The researcher
conducted the survey personally with the respondents. Further research will be carried out
through consultation of books, journals and magazines. Secondary data will support primary
data collection to show a clearer picture of the information technology's effect on Bank
Keshavarzi Iran.

4. Findings and Conclusion

The research brought to light the fact that IT has been of great impact on bank Keshavarzi Iran,
Golestan province. The findings both from the questionnaires and the library research reveal
that IT leads to saving the time of the customers and the employees conspicuously, cutting
down the expenses and facilitating the network transactions. The details are as follows:
Regarding the first research question, both the customers and employees believe that IT has a
meaningful effect on saving the time of the customers and the employees of bank Keshavarzi
Iran, Golestan province. (84% and 91% respectively) Apropos to the second question, around
91 % of the bank managers believe that IT has a meaningful effect on cutting down the
expenses of bank Keshavarzi Iran, Golestan province. Concerning the third research question,
the customers and bank employees answered that IT has a meaningful effect on facilitating the
network transactions of bank Keshavarzi Iran, Golestan province. (88% and 93% respectively).
The data gathered from the library research also approved the abovementioned results. The
outcome of this study is limited only to the data gathered from the books and journals about
information technology and its impact on bank Keshavrazi Golestan province and from the
primary data gathered from the result of the questionnaire survey and interview conducted by
the researcher. As the research was completed in a limited period of time other factors and
variables are not considered. This might have an impact on the results of the study. We cannot
deny that the advancement of technology was a necessity of the current era. Businesses need
to adopt and embrace new technologies to provide excellent business operation and services to
their clients. The bank industry is not an exception with regards to this adaptation. So it is worth
suggesting that the banking industry needs to spend more on IT and better apply IT to improve
its operations, customer services and products. Banks should devote more resources to
development of secure IT systems, services and products

Activities/Assessments:

List down 5 changes in life, how technology affected banking industry. Use a yellow sheet of
paper or save and send file to schoology account as Assign7 LN, Yr. and Sec doc file

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Write the SWOT analysis about the video https://www.businessinsider.com/future-of-banking-
technology in a yellow sheet of paper, save and attach file to our schoology account as :
Assign8 LN, Yr. and Sec doc file

Write the Facts of the Case, Issues, Recommendations cited in the Case Problem in another
sheet of paper, or save and send file as Assign9 LN, Yr. and Sec doc file

Online quiz via schoology

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NEW TRENDS IN E-COMMERCE

Topics : Voice search is growing, Mobile e-commerce,

Augmented Reality in online shopping
Chatbots e-commerce, 3D e-commerce, use of Artificial Intelligence, More secure
Digital Payment system

Trends in e-commerce

The ecommerce world is becoming increasingly competitive. To stay ahead of the competition,
ecommerce trends need to be constantly monitored. No matter how mature your ecommerce
store is right now, if you don’t keep up with ecommerce trends, you’ll risk falling drastically
behind. You need to keep looking ahead to ensure future success. As we move into 2020, you
need to know these trends in order to take advantage of them. That’s why it’s so important that
ecommerce trends are analyzed and adopted in a timely manner. By doing this you can drive
your ecommerce brand forward, and stay ahead of your competition.

In the past few years, we have witnessed numerous changes in the E-commerce industry and a
shift in consumer buying patterns.
E-commerce and Mobile Commerce have shown strong growth and more sales for the
merchants.

Voice commerce is expected to be the third wave and will allow consumers to buy products just
by using their voice.
In the year 2020, 50% of all the searches on the internet will be based on voice and 30% of all
the searches will be done using a device without a screen. According to juniper research, 1.5
billion devices are acting as digital voice assistants, and are predicted to grow to 8 billion by the
year 2023. The voice trend is enabled by digital voice assistants and these assistants are being
installed in a wide range of devices including smartphones, televisions, smart speakers, self-
service kiosks, home appliances, and even in cars. The tech giants who are aiming to own the
future of voice commerce are making it omnipresent across all the devices.

Business Potential of Voice Commerce

Interactions through voice make it easier for users to access the internet while driving or doing
their chores. Businesses that consider the numerous benefits of voice search reap considerable
benefits. We will go over the numbers which speak out how inevitably the voice industry is
growing stronger, as well as the ways through which businesses can make the most out of it. In
the United States, 21.6% of the population has accessed smart speakers through the Amazon
devices which hold 60% of the market as of May 2018. The digital assistant hardware and
google voice search gained traction of 25% of the market in 2018. The voice commerce and
voice shopping are still very new as only every fourth smart speaker owner have given it a try.
But the users do not limit their voice shopping to reorder or replace the items, they order new
products as well, the average price range is below $100. In the second quarter of 2018, the
global market for voice search devices increased by 187%. More than 8 million Google Home
models were sold by Google in 2019 and Amazon had sold more than 4.1 million Echo devices

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by the second quarter. By the end of 2024, the global market for voice-based smart speakers
could be worth $30 billion.

Voice Commerce: The Game Changer

Voice search has the potential to impact E-commerce quite significantly. It is not just a feature
but a game-changer for the market and we will talk about how it can be leveraged to maximize
the benefits to the E-commerce business. With the rise in voice technology, the branding will not
remain entirely visual and it will be both heard and seen. The whole concept of marketing is
based on building the perception of a product in the customer’s mind so that it can grow and
scale. Your brand needs to focus on the core of marketing to call for better business.
Voice Commerce is AI-enabled and has completely changed the way we shop online and
communicate. Brands are persistently opting for new ways for payment, security, upsell,
promotion, and customer service without human intervention. Before long, voice commerce will
overpower the market and become as ordinary as mobile phones. The technology is already
picking pace and here are some of the ways how voice commerce is evolving the E-commerce
market today –
• In the USA, voice commerce accounted for $2 billion in sales last year and more than
35% of households have purchased retail items and consumables through voice
platforms.
• According to a recent survey, 22% of businesses have already released a voice
application and 44% of businesses are planning to do the same this year.
• 29% of the brands are offering purchases through voice, 31% have enabled renewals
and 34% of the brands have enabled customers to access product/service information
through voice.
• 71% of businesses acknowledge that voice commerce can enhance user experience
and increase customer engagement. Around 66% of the businesses have already
increased their conversion rate, 45% of them have enabled voice services to track the
orders and 32% of businesses provide search functionality through voice.
• The study also shows that 91% of the businesses are making huge investments in
voice and 94% of them are planning to increase their investment in the next year.

Mobile Commerce
Mobile commerce (alternately known as m commerce or m-commerce) is the browsing, buying,
and selling of products and services on mobile devices such as cellphones or tablets. In other
words, it's a complete online shopping experience, but with all the convenience of being on a
cellphone or tablet.
M-commerce is booming, and not showing any signs of slowing down. Within the next two
years, it is expected that the majority of purchases will be completed using mobile devices.
• 96% of Americans own a cellphone (Source: Pew Research Center
• 8 out of 10 Americans shop on their mobile devices (Source: Pew Research Center
• Mobile commerce is expected to outpace non-mobile commerce in 2021
(Source:Statista
• Mobile digital advertising spend is nearly double that of desktop advertising spend
—$71B was spent on mobile advertising in 2018, while only $37B was spent on
desktop. (Source: Journalism.org
• On Black Friday of 2018, 66% of shopping was done on mobile devices
(Source:PixelUnion

Types of Mobile Commerce

Mobile commerce doesn't just refer to buying a product online—it includes all purchase decision
behaviors made using a mobile device.

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The different types of mobile commerce include:
• Browsing products online using a mobile device
• Searching for specific products online using a mobile device
• Reading product reviews or viewing product comparisons on a mobile device
• Purchasing app-economy services (such as rideshare or food delivery apps)
• Purchasing or renting digital content (paid apps, video, music, etc.) on a mobile device
• Interacting with branded apps (such as the Amazon shopping app) on a mobile device
• Mobile banking
• Mobile retail payments (such as Samsung Pay or Apple Pay)
• Mobile person-to-person payments (such as Venmo or the Cash app)

With the rise of mobile technology, it is becoming less valuable to think about what is mobile
commerce and what isn't—almost all types of commerce, from shopping to investing, are
already being done on mobile. As such, much of the discussion around mobile commerce
focuses on user experiences when engaging in mobile commerce.

The Future of Mobile Commerce

The most prominent trend of mobile commerce is its market share growth. M-commerce
spending in 2018 totalled 501 billion, expected to grow to 740B by 2023:

Source: Statista
Another trend in m-commerce is that customers desire more information on mobile websites.

Studies show that 80% of smartphone users want more product information when shopping on
their mobile devices. A large part of m-commerce's appeal may be convenience, but if that
convenience comes at the sacrifice of information, customers will be sure to look elsewhere.
Make sure to include all of the information available on your desktop pages in a mobile-friendly
format—accordion menus and dropdowns can help control page length.

The last big trend, by far, is the rise of tablet commerce. Much of it has to do with the nature of
tablets themselves. With their larger screens and portability, tablets make it easier to navigate
mobile ecommerce websites. With these features, it's no surprise that 55% of tablet owners use
their tablets for online shopping, whereas only 28% of smartphone owners shop on that device.
With all its growing clout, m-commerce is the rising star of the ecommerce world. By
understanding it and keeping tabs on where it's going, business owners put themselves in the
best position to take advantage of all m-commerce has to offer hanks to customers’ increasing
demands for value-added services, the pace of this evolution looks set to be maintained over
the next 12 months. As expected, businesses now demand continuous innovation of and
adoption of emerging technologies in order to balance the market-demand pull with a healthy
supply push.

Augmented Reality in E-commerce allows customers to preview products or experience

services in their normal lives before buying. Using Augmented Reality, customers can preview
products and be more likely to pick the right product the first time. Check out our infographic
“Augmented Reality in E-commerce” to know how augmented reality is improving the
experiences of online customers and how e-commerce businesses can increase their online
business by implementing augmented reality on e-commerce websites.

Point of Sale (POS) Retail

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The revolution in the digital payment system has been the most significant factor to disrupt the
retail industry. Point of sale systems (POS Systems) are making inroads in the digital payment
industry, with the promise of time-saving conveniences for merchants and restaurants alike. But
retailers have so much to benefit from this continued transformation.

According to a recent analysis report, the Point of Sale (POS) industry will hit the $116 billion
mark by 2025, with a compound annual growth rate (CAGR) of 9.9%. today, customers rightfully
demand safe and
unique

shopping
experiences while businesses depend on data to improve their decision-making process, which
makes the point of sale system a bridge the gap between consumers and business owners.

The digital transformation also brings changes in the payment systems in the retail industry. As
the number of mobile users continue to increase, cash and cash registers have been eliminated
from the retail space, encouraging technology to create a portable POS solution for retailers.
Even in countries like India where cash was the preferred mode of payment, consumers in the
cities now prefer card payments to cash.

Many startups today have now introduced digital payment solutions which allow consumers pay
from their smartphones while some other startups have introduced mobile point of sale (MPOS)
technology, which means retailers can easily accept card payments and ensure a personalized
and engaging shopping experience for their consumers. In the future, we can expect to see
more retailers introducing the mobile point of sale solution so they can accept cash, cards, and
mobile payments.

These new and emerging tech solutions have addressed the issues for small retailers who have
the type of data that was only accessible for big retailers and enterprises. Perhaps the use of
big data and analytics will be applied at every stage of the retail process in the future, to help

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determine trends, predict consumer demands for fast-selling products, and identify consumers
who are likely to purchase these products.

Nowadays, retailers want their sales data or store transactions to be quickly accessible
wherever they are – from their smartphones, tablet, or computer. This is where cloud technology
comes in. An increasing number of pos systems are designed with integrated cloud solutions. In
the future, we can expect to witness the adoption of cloud-based tech solutions by many small-
medium-sized retailers.

Ecommerce Payments
More and more shoppers are ditching the brick-and-mortar stores for online shopping. The
ecommerce industry is enjoying the innovations in the digital payment systems, and the growth
in the industry is largely driven by the demand, convenience, and an increase in emerging
checkout technologies.

The payment habits of today’s shopper continue to evolve. They no longer want to be restricted
by traditional modes of payment, and with emerging technologies taking center stage, they do
not have to be. As concerns surrounding the credibility of entering payment credentials in the
online space continue to increase, today’s shopper is getting savvier about their payment
choices.

Checkout technology in the e-commerce industry has allowed merchants to integrate alternative
payment methods into their existing payment processes. Since consumers always prefer a
hassle-free process, it is increasingly likely that merchants will try these new trends offered by
ecommerce merchant processors, in the very near future. Rather than worry about upgrading
outdated legacy systems, these alternative payment methods continually adapt to the needs of
merchants to enable them satisfy the growing demands of today’s consumer.

Crypto Payments
We have come a long way since Satoshi Nakamoto’s innovation in November 2008. Major
advancements have been experienced in the capabilities of blockchain technology to ensure a
better future of electronic payments through cryptocurrencies. When considering the landscape
of digital or non-physical currencies today, consumers have raised a few concerns with using
companies that process fiat payments. But cryptocurrencies offer a lot more – and this is why it
is the future of electronic payments.

Cryptocurrencies solve the problem of privacy by providing better data security and making
payment processes safer for users. Another problem the consumer faces with fiat payment
processes is the issue of pending transactions. While some transactions can be completed on
the same day or the next, other payments might take weeks to complete.

These prolonged “pending” transactions is far from helpful for someone looking to balance an
account. As the future of electronic payments, cryptocurrencies can solve this problem by
ensuring instantaneous transactions almost 100% of the time. In cases where crypto payments
do not go through instantaneously, an unconfirmed transaction can be simply canceled without
the fear of losing funds.

Crypto payments are especially needed by merchants as they offer new competition. Many
traditional payment processing companies do not feel the need to reduce fees because
merchants do not have a lot of choices. Rather than working with only a handful of payment
options, merchants can now explore the thousands of alternatives cryptocurrencies offer. A

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growing number of businesses already accept Bitcoin as well as other crypto payment options
alongside the traditional credit/debit card payments. In so doing, these merchants are able to
decide what works best for themselves – and for their customer.

Review : https://synergytop.com/blog/is-2020-the-year-for-voice-commerce/Is voice commerce

the next wave in commerce?

Activities/Assessment:

Identify 10 local and 10 international companies and describe how they use any of the new
trends in technology. Write your answer in a yellow sheet of paper or send file as Assign10 LN,
Yr. and Sec doc file

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